Trade Finance

What is Trade Finance?

Trade finance is a term often used by the finance industry to describe a number of different activities, however, in its simplest form , trade finance is most commonly used explain a funding process where a supplier requires a purchaser to prepay for goods shipped.

A trade loan is ideally for businesses who:

Have a large inventory holding compared to turnover

Run a large overdraft purely because of long inventory hold times

Deal with debtors who pay on long terms i.e. 60 or 90 days.

Deal with suppliers who require upfront payments or offer large early payment discounts to debtors.

How trade finance works:

A trade loan captures the entirety of the a business cash conversion cycle, that is – the ordering process, the holding period and the debtor collection days.

Why not give us a call on 1300 930 106 to talk to us about your options. Alternatively, you can find more information here.

This website contains general information for educational purposes. It does not take into account either the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs yourself before making any decisions based on this information.